China

Economists expected China's reserves to fall by around $33 bln in November. Instead, they fell by a little more than $87 bln. This is the third largest decline it has recorded, and a little below the $94 bln drop reported in August.

China's reserves peaked in June 2014 near $3.993 trillion. At the end of November, they were just above $3.438 trillion, which is essentially where they stood in October 2014. What happened in November?

Chinese firms have invested in natural resources in low- and middle-income countries on a global scale. These include mining operations and large hydropower dams. Often these projects have environmental and social implications.

There are a range of reasons for these investments. Most have been made since the Chinese government issued its ‘Going Out Policy’ to encourage firms to invest overseas.

No, not Donald Trump trying to savage it any time he comes within three feet of a microphone. It’s that enormous social shifts in recent years – like the forcible relocation of 250 million people from rural areas to urban environments – have transformed the country, in the words of its Academy of Social Sciences, from “a society of acquaintances into a society of strangers.”

The US dollar is firm against the major currencies and nearly all the emerging market currencies as well to close out the week (and month) Participants are clearly focused on next week's events, and in particular, the prospect of additional easing measures by the ECB. In addition, next week's speeches by Yellen and the monthly jobs report is expected to underpin expectations for the Fed's lift-off in the middle of December.

On 29 October 2015, the 18th central committee of the Chinese Communist Party (CPC) issued a communiqué allowing all Chinese couples to have two children. The new policy will come into effect from March 2016 after formal ratification by the National People’s Congress. However, it is unclear whether ending China’s more than 30 yearlong one-child policy will trigger the CPC’s hoped for demographic changes.

Overnight, Chinese President Xi Jinping gave the strongest indication yet the country will revise down its economic growth goal to 6.5%.

They will have an official target when China releases its highly anticipated 13th five-year plan in March next year, but they are playing on the idea of the “economic new norm.” This means lower percentage rates of economic growth (although rates still high in international terms) coupled with structural economic reform.

The long-anticipated abolition of China's one-child policy is a first step in the right direction. However, they can do much more. In the West, the criticism of the one-child policy is that it is a "cruel Communist strategy." In reality, most opponents of that policy were Marxists and the idea itself came from the West.

China’s new development blueprint seeks to realize a moderately prosperous society by 2020.

At the recently concluded Fifth Plenum of the 18th Communist Party of China Central Committee, the “Four Comprehensives” became the grand blueprint for the 13th Five-Year Plan (2016-20). Each of the four tasks requires broad measures and pragmatic actions.

China’s latest five-year plan, the details of which were endorsed at last week’s fifth plenum, aims to double the nation’s GDP and per capita income by 2020 (from 2010 numbers).

The 2020 deadline is important because it is the final year of the 13th five-year plan and the first plan led by Xi Jinping and Li Keqiang. It would allow the Chinese Communist Party to claim a doubling of the country’s economic size in the decade preceding the 100th anniversary of the Party’s founding in 1921.

China is scrapping its one-child policy and officially allowing all couples to have two children. While some may think this heralds an overnight switch, the reality is that it is far less dramatic. This is, in fact, merely the latest in an array of piecemeal national and local reforms implemented since 1984.

In fact, the change is really a very pragmatic response to an unpopular policy that no longer made any sense. In addition, much like the introduction of the policy in 1978, it will have little impact on the country’s population level.